Insurance and consumer fraud is an increasing problem to both consumers and insurance companies. As the flow of goods from unknown sources increase, the potential for fraud increases accordingly. In the automobile industry, insurance and consumer fraud is becoming increasingly problematic and more difficult to detect. For example, after a major natural disaster, such as a hurricane, cars that were flooded and physically damaged during the storm may be transported from the area, cosmetically repairs, and resold in car lots to unsuspecting consumers. These cars may have had extensive water and physical damage, but are retouched enough to perhaps fool an unwary consumer.
In another example, a car may be involved in an accident. The damage may have been extensive enough that the car was totaled and is structurally unsafe to drive. Unscrupulous individuals, though, may buy the car at auction, do some cosmetic repairs, fraudulently “clean up” the title, and then sell the car to unknowing consumers. In a further example, a person may take his or her car into the shop for repair to replace a body panel damaged in an accident. A body shop may replace the panel with a substandard, unapproved, cheap part but claim to the consumer and insurance company that the repair was done using an approved part. The body shop may then receive a windfall of profits by using substandard, and often unsafe, parts but charging higher fees often associated with approved parts.